Butler County officials considering water rate hike after new cost with Hamilton

Butler County water customers may see a rate hike next year since the cost to purchase water from the city of Hamilton will increase by 3.25% after the first of the year.
Butler County water customers may see a rate hike next year since the cost to purchase water from the city of Hamilton will increase by 3.25% after the first of the year.

Butler County water and sewer customers haven’t seen a rate hike in more than a dozen years, but officials are considering an increase because the cost to buy water from the city of Hamilton is increasing about 3.25%.

“We’ve been spending a lot of time looking at our rates. We haven’t completed our analysis yet, but yes, we are getting very close to recommending a rate increase,” Water and Sewer Department Director Martha Shelby told the Journal-News. “The exact timing I have not determined yet.”

The county renegotiated its water purchase contract with Hamilton in 2014 and saved about $28 million over the life of the new deal. Beginning in 2015 the county’s rate decreased from $2.78 per thousand gallons to $1.66, the same rate the county was paying to Cincinnati for some of its customers.

The new rate was locked in until 2022, then the rates can go up annually by the consumer price index or 3.25%, whichever is less.

County Administrator Judi Boyko said it is not just the Hamilton contract increase influencing the rate analysis. Operational costs like materials, supplies and labor — largely due to the pandemic —have also exploded.

Every year the city of Oakwood surveys entities that provide water and sewer in southwest Ohio on rates charged, based on 22,500 gallons used in three months. This year Butler County ranked eighth with the combined quarterly bill of $202.37. The lowest quarterly bill of the 63 surveyed was Union with a rate if $178.90, and the highest is in Yellow Springs with a quarterly bill of $585.23.

If the commissioners raise water rates 3.25%, based on the average quarterly water bill of $118.23, residents would see a $4 increase.

ExploreButler County’s big decisions: Which of $130 million in requests to approve for COVID-19 relief funds

The last time the county adjusted its rates was in 2009 when they were decreased. When the contract was adjusted six years ago the commissioners did not lower customer’s rates because the county had absorbed price increases for years and did not pass the cost to customers.

Commissioner T.C. Rogers said he would vote to pass this potential rate hike onto their customers, “we’re not going to absorb that, no.” Commissioners Cindy Carpenter and Don Dixon could not be reached for comment on potential rate increases.

Shelby said if they spend more buying water from the city than they collect from customers it will jeopardize the annual capital improvement program to upgrade aging systems. This year she budgeted nearly $5 million for water and $5.6 million for sewer capital improvements.

They have been trying to spend about $2 million a year replacing failing cast iron water mains. The commissioners recently approved a $2.1 million contract to replace more than 10,000 feet of cast iron pipe on 10 streets in the Dutchland Woods subdivision and on Shafor Road in Liberty Twp. She received a $538,000 grant from the Ohio Department of Public Works.

“With inflation we’re making less progress, with the same expenditures you’re going to replace less and less in the years to come,” Shelby said. “We have many miles of it (cast iron pipe) left but we’re replacing it strategically. We won’t replace it just because it’s cast, we look at where we’re having breaks.”

There is another potential revenue source that could impact the rate review. The county was awarded nearly $75 million in federal COVID American Rescue Plan funding and one of the explicit areas money can be spent is on water and sewer projects. Shelby has identified $20 million for sewer work and $7.4 million for water projects.

Boyko said if the commissioners choose to spend some of the ARP funds on water projects it could change the rate hike conversation.

“If costs are going up but you are able to either reduce or level off costs in a different category like capital, then that’s all part of the evaluation of the rates,” Boyko said.

The commissioners have received requests totaling more than $130 million — not including Shelby’s projects because she hasn’t made a formal funding request — from other governments, social service and other agencies countywide. No decisions have been made.

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